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This kit includes tools and guidelines to assist you in drafting an Incorporated Joint Venture Agreement.

A Joint Venture Agreement is a legal document by which two or more entities can combine to do business together or undertake an economic activity together. The parties agree to create a new entity by both contributing equity, and they then share in the revenues, expenses, and control of the enterprise in the proportion of their capital contribution. The venture can be for one specific project only, or a continuing business relationship.

In India, the joint venture contracts vary with respect to both the objective of the joint venture and its joint implementation. As a result, there exist two types of joint venture model contracts: the first in view of creating a company; the second in view of cooperation without creating a company. These are applicable to different situations. This joint venture agreement is a contract for a joint venture specific to a project or a common economic purpose wherein the incorporation or forming an entity is undertaken. Such an agreement is generally known as Joint Venture Shareholder’s Agreement or an Incorporated Joint Venture Agreement.

Among others, this form includes the following key provisions:

Incorporation

Authorised Capital

Memorandum and Articles of Association

Directors and Management

Various Covenants

Profits; Losses; Expenses; Dividends

Intellectual Property

Term and Termination

This attorney-prepared Incorporated Joint Venture Agreement:

Description and Instructions for Incorporated Joint Venture Agreement

Incorporated Joint Venture Agreement for use in India

Law Compliance: This form is designed for use in India.

This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.

Incorporated Joint Venture Agreement

(India)

THIS JOINT VENTURE AGREEMENT (“Agreement”) is made at ________, on _______________ day of ___________ 20___ between _____________________, a company registered in India, under the Companies Act, 1956 and having its registered office at ___________________________________ , India, hereinafter referred to as the "First Party ” (which expression shall unless repugnant to the context include the Party of the First Part's permitted successors and assigns) AND _____________________________,a incorporated under the Companies Act, 1956 _______, and having its Registered Office at ___________________________, (country) hereinafter referred to as "Second Party ” (which expression shall, unless repugnant to the context include the Second Party 's permitted successors and assigns).

WHEREAS the First Party is engaged in _______________ in India;

WHEREAS the Second Party by itself and its subsidiary companies is engaged in ______________________ in many other countries;

WHEREAS the First Party and the Second Party have entered into an Agreement for the purposes of expanding their business by setting up of a Joint Venture Company (hereinafter called the "JVC") to be set up in India for the purposes of ______________________;

OR [WHEREAS the Parties hereto have decided to float a project of _________________ ( hereinafter referred to as the "Project")];

WHEREAS First Party and Second Party both having the necessary infrastructure and the capabilities of providing the services required for the Project have agreed to form a Joint Venture Company (hereinafter called the "JVC") for the Project and First Party and Second Party are desirous of entering into an Agreement for constituting Joint Venture Company in terms hereof;

WHEREAS the Parties hereto for the said Project have decided to form a Joint Venture Company and whereas subject to all necessary consents, licences, permissions and authorities to be procured for the formation and incorporation of the JVC in the State of ___________ India, with the principle object, inter alia, being that of ____________________;

IN CONSIDERATION of mutual Agreements and undertaking hereunder set out the Parties to this Agreement have granted the rights and accepted the obligations as follows:

1. Incorporation. Both the Parties shall undertake to constitute a new Company (hereinafter called the Joint Venture Company (“JVC”) which will be incorporated under the provisions of the Companies Act, 1956 by the name of _____________. The JVC will be registered in the State of ___________ in India and will have its registered office _________________________________________________ or such other place/s as the Parties may agree upon. The headquarters of the JVC shall be at _________, India.

2. Purpose. It is agreed between the Parties hereto that the said JVC shall have as its object of business recorded in the Memorandum of Association & Articles of Association inter alia

_________________________________________________________________ . The main objects shall include _______________________. The JVC shall be owned, operated and managed by the Parties jointly in accordance with this Agreement and the Memorandum and Articles of Association.

3. Authorised Capital. The initial authorised capital of the JVC will be Rs. _____________(Rupees_____________)- divided into ___________ equity shares of Rs. 10 each. The First Party and the Second Party have agreed to subscribe the share capital of the proposed JVC in the proportion of ______ i.e., the First Party to take ____ equity shares of the aggregate value of Rs.____ and the Second Party ____equity shares of Rs.10/- each of the aggregate value of Rs.____/-.

In addition to the initial subscription mentioned hereinabove, the Parties agree to subscribe to the further issue of share capital of the JVC as may be required in the proportion of ____, i.e., the First Party __% and the Second Party __%.

OR [The Parties further agree that the authorised capital of the said JVC may be increased from time to time as per the provisions of the Companies Act 1956 and as per the financial requirements of the said JVC and as approved by the Board of Directors/General Body Meeting and it is further agreed that on the authorised capital being increased First Party and Second Party will be entitled to subscribe thereto in equal ratio and only after the other Party by written notice under acknowledgement rescinds the offer to apply for additional shares will the other be entitled to subscribe for those share not applied for]

4) Memorandum and Articles of Association.

A) The Memorandum and Articles of Association of the JVC will be as set forth in the draft attached as Annexure - I. These documents may be amended from time to time by written Agreement between the Parties, subject to the provisions of the Companies Act, 1956.

B) Both Parties agree that on signing this Agreement, the Parties agree to take necessary action for the registration of the Joint Venture Company within 30 (thirty) days hereafter.

C) The proposed Memorandum and Articles of Association of the JVC shall include the provisions, but not to limited to the following:

i) The JVC shall have a Board of Directors composed initially of ___ directors, __of which shall be of the choice of the First Party and __ of whom shall be of the choice of the Second Party.

ii) The Chairman of the Board of Directors shall, for the first accounting period of the JVC, be one of the members of the Board of Directors appointed by the First Party and for the duration of the second accounting period be one of the members appointed by the Second Party, where after the Parties shall alternatively have the right to appoint the chairman during the subsequent accounting periods of the JVC.

iii) The Board of Directors shall meet regularly at least ___ times a year, i.e., once in each quarter.

iv) At least 21 days prior notice shall be given to all directors of the Board whether residing in India or otherwise. In case of directors residing outside India, notice shall be sent by telex/fax/cable. Each notice shall set out in sufficient detail, the agenda of items to be transacted at each meeting. A meeting may be held at short notice if it is agreed by all the directors in writing.

v) The quorum necessary for transacting any business of or taking any decision of the Board of Directors shall consist of at least ___directors, of whom at least __ shall have been those appointed by the First Party and __ by the Second Party.

vi) If the minimum number of directors of each of the Parties is not present at the Board Meeting, the meeting shall be adjourned for a day, which shall not be less than 10 days from the original meeting and if at such adjourned meeting the quorum as required is not present, then the adjourned meeting may proceed, provided that the Board shall not take any action concerning matters specified in Annexure 1 hereto and any attempted action by the Board shall be null and void.

5) Directors.

A) The Parties have agreed that they will obtain an undertaking from each person nominated by them to be a director of the JVC that each of them will implement each and every provision of this Agreement.

B) It is further agreed between the Parties that in the event of any of the director from any of the group retiring/being removed/dying or becomes unable to perform the duties of a director or for any reason ceases to be employed by the Party that nominated them then such Party shall promptly by written notice served to the other Party name in successor thereof so that the strength of the Board of Directors remains same as before;

C) Parties shall exercise their powers to ensure that the appointment of directors nominated by each other is not terminated except as may be mutually agreed. In case any director vacates his office due to any reason, including operation of law, the Party which had appointed such director shall have the right to fill in such vacancy by appointment of another director to fill such vacancy and Parties shall ensure that the Board fills such vacancies as provided above.

6) Management.

A) The day to day implementation of the projects and operation of the JVC shall be controlled by the Managing Director of the JVC to be appointed by both the Parties unanimously, who shall be in charge of the technical and administrative operations of the JVC within the policy guidance set by the Board.

B) The Board of Directors shall have full responsibility and authority for the performance of the JVC including but not limited to assignment of services between the Parties, preparation of the schedule of services, settlement of disputes and any other items affecting the performance of services under this Agreement;

C) The Board of Directors shall constitute a committee being the Executive committee for the execution of the work of the Project pursuant to this Agreement and the said committee shall consist of ___ representative/s of First Party and ____ from Second Party;

D) The Executive Committee shall be:

i) Responsible for the direction and management of the work for the Project in accordance with the policies and procedures established by the Board of Directors;

ii) Responsible for the Co-ordination of the work; and

iii)____________________________________________ [Additional duties]

E) The Board of Directors may from time to time change the existing Executive Committee by replacing its representatives, however the representation of First Party and Second Party shall always be [equal] in the ratio of ___ on such committee;

F) Action and decisions of the Board of Directors shall be by unanimous vote and shall be final, and conclusive and binding upon both First Party and Second Party;

G) In the event the Board of Directors is unable to reach any unanimous decision, First Party and Second Party agree that the matter shall be referred to Mr.__________ and _____ Mr. _____with regards to matter relating _________________________________ who shall make an interim decision which may be subject to arbitration if the Parties hereto do not accept the decision;

H) The Parties agree that the Board of Directors shall by and large conduct business of the said JVC on the basis of the Agreement arrived at between them under this Agreement or mutually agreed between them in writing from time to time between them, giving effect to the understanding arrived at between them under this Agreement.

7) Important Decisions.

The following matters shall be decided only by the affirmative vote of the holders of at least 3/4ths of the equity shares of the JVC or of, at least one vote in favour from the group of directors appointed by the First Party and one vote in favour of the directors appointed by the Second Party, it being the intent of the Parties that the following matters will not be decided by the Board of Directors without the consent of at least one director appointed by the First Party and one director appointed by the Second Party :

•Amendment of Memorandum or Articles of Association of the JVC

• Increase or reorganise of share capital of the JVC

• Terms relating to engagement of Managing Director of the JVC

• Declaration of dividends

• Merger or amalgamation of the JVC

• Dissolution or winding up of the JVC or disposition by the JVC substantially all of its assets

• Secrecy and Non-competition

8) Confidentiality. It is agreed by the Parties that during the term of this Agreement they shall hold in confidence and shall not disclose to any third Party without mutual Agreement, any technical know- how, advice, statistical or other data or information that the Parties or the JVC may receive from each other or their employees except as is necessary in the ordinary course of business for implementing this Agreement or if disclosure is required under law.

9) Responsibilities of Parties. Following are the responsibilities of each Party toward the JVC: (List out the responsibilities or obligations of each Party toward the JVC and how the responsibilities are being divided between them. Also add any licenses or Agreements such as Licensing, Technology Transfer Agreements if executed for specific expertise)

Add as applicable:

A) First Party and Second Party shall furnish all necessary know how experience, expertise, man power, managerial assistance to make success of the project undertaken by the said JVC;

B) The JVC shall share, in the manner provided for in the Agreement, the obligations and responsibilities for the services to be performed for the Project as described in this Agreement. Both First Party and Second Party shall give strategic input to the JVC to perform the specific services as given below:

C) It is agreed between Parties hereto that the JVC will employ necessary personnel for the purpose of services to be rendered [for the project] for the works to be undertaken pursuant to this Agreement. The required personnel shall be employed by mutual consent of both Second Party and First Party. The salary and payment with regards to the said employees shall be borne by the said JVC;

D) Both Parties agree that following are the kinds of expenditure that shall be permitted for reimbursements: ____________________________________________________[Mention approved expenses]

10) Covenants of Parties. Both Parties hereby covenant that:

A)[Neither First Party nor Second Party shall enter into any separate Agreement/s with any third party for services in connection with this Project as long as the association between First Party and Second Party with regards to the Project is in existence;] Add only if a specific project is undertaken.

B) The services required of the Parties to Joint Venture Agreement shall be limited to the performance of services required under this Agreement;

C) First Party and Second Party intend that the responsibilities and obligations set out in this Agreement shall be borne and performed by each of the party as stated herein and the financial contribution as and when required for the JVC shall be in proportion of their participation as provided in Clause 3 of this Agreement;

D) The Parties shall be working in co-ordination with each other and for the furtherance of the interest of the said JVC and during the course of work any information, expertise or knowledge material, documents or trade secret exchanged between the Parties shall be kept secret and neither parties hereto shall divulge the same to any third party in any manner whatsoever and accordingly the Parties shall on the incorporation of the said JVC include a Clause in the Memorandum and Articles of Association to maintain the trade secret between the Parties hereto/shareholder/Directors or anyone employed by the said JVC and accordingly the Parties shall also execute such documents between them after incorporation of the said JVC as may be necessary and as advised;

E) During the term of this JVC and for __ years after the termination, the Parties shall not compete with each other directly or indirectly of the business of the JVC.

F) Parties shall not pledge, hypothecate or encumber their shares in the JVC except with the prior consent in writing of the other Party

11) Profits; Losses; Expenses; Dividends.

A) It is agreed between the Parties that amounts received by the JVC will be allotted to First Party and Second Party equally and the distribution so made will be irrespective of the expenses that may be incurred by either Party towards their staff or expenses or any other head of accounts;

B) It is agreed between the First Party and Second Party that after meeting the basic expenses of the JVC, the amounts in hand of the JVC will be distributed between First Party and Second Party in the respective proportion set forth in Clause 3 of this Agreement. Upon completion of this Agreement, funds remaining after payments of outstanding indebtedness of the JVC shall be distributed to the respective Parties in the same proportion as set forth in Clause 3 above;

C) Should the Board of Directors determine that additional funds are required for the performance of the works under this Agreement for any reasons or to pay losses arising therefrom or to eliminate any deficits resulting from prior overpayments to the First Party or Second Party, the Parties shall within __ working days after the decision of the Board of Directors contribute such funds in proportions set forth in Clause 3 of this Agreement;

D) The Parties hereto agree that all the preliminary expenses with regards to the incorporation of the said JVC including all the costs, charges, expenses, professional fees, out of pocket expenses that may be incurred during the incorporation and formation of the said JVC and incidental to the establishment of the said JVC shall be borne by and paid for by the said JVC;

12) Auditors. The Auditors of the JVC shall be Messrs. ___________________ of __________ or such firm of Chartered Accountants as may be agreed by the Parties hereto who shall be responsible in maintaining the day to day books of the JVC on the generally accepted accounting principles.

13)Bankers. The bankers of the JVC shall be _______________ , having its office at ___________________ or such other bank or banks as may be agreed to by the Parties hereto. All payments received by the JVC, in connection with this Agreement, shall be promptly deposited in a joint account and invoices received by the JVC shall be paid by cheque drawn against the said joint account.

14) Intellectual Property.

A) Intellectual property developed solely with respect the works undertaken pursuant to this Agreement will be jointly owned by all Parties. Such intellectual property which shall include, but not limited to, reports, analysis, designs, drawings, specifications and other instruments of service prepared pursuant to this Agreement shall be registered, patented, copyrighted and secured as intellectual property rights as per the provision of law and in the name of the JVC. The JVC shall have the ownership and rights and privileges of all intellectual property rights acquired in the course of the [the Project] performance of the works under this Agreement and in so far as it is consistent with this Agreement Second Party and First Party will be entitled to use such intellectual property for any of its purpose including to prepare documents for other projects based on such project information without any payment thereof;

B) The Parties hereby offer licenses to each other for the intellectual property or copyrights owned by each Party developed before the execution of this Agreement and which may be used in the performance of works under this JVC. Each Party shall be deemed to have granted the other Parties a royalty-free, non-exclusive and non-assignable license to make use of any such documents or other material and data or other information and devices or processes in the context of the works under this JVC. The licensee/s shall have no right to reproduce, copy, alter, reverse engineer, and sell the licenses granted by the licensor.

C) Neither of Second Party nor First Party shall assign or transfer the intellectual property rights and interest so acquired or established pursuant to this Agreement by the JVC in the course of its works, nor permit reproduction of proprietary documents, in any manner resulting in infringement or violation of any of the intellectual property rights secured by the JVC during the course of the JVC except upon written consent of the other Party

15) Term; Termination.

A) The terms of this Agreement shall remain in force until terminated earlier for the reasons set forth herein.

B) This Agreement will be terminated:

i) on the date mutually agreed in writing by the Parties; or

ii) on the date when the JVC is wound up by an order from a court;

iii) for a party, when it ceases to be a shareholder in the JVC.

iv) In the event that a Party fails to make timely payment of any amounts due under this Agreement, or within 10 business days after demand therefor, the non-breaching party or parties may terminate any of this Agreements upon 30 days prior written notice, unless the breaching party cures such breach by paying all past-due amounts within such 30 day notice period, provided that such breaching party shall be entitled to use such cure provision no more than once in any 12 month period.

C) Termination of this Agreement will not prejudice any accrued rights or liabilities of a party.

D) Clauses 8, 10 E), 14 C) survive for __ years after the termination of this Agreement and will be enforceable at any time at law and in equity and will enure to the benefit of and be enforceable by the JVC and the Parties and its or their successors and assigns and be binding on each party and its or their successors and assigns.

16) Transfer of Shares.In the event of any one of the Party decides to dispose off its shareholding, which shall always be the entire shareholding, it shall give notice of its intent of disposal to the other Party, and the other Party will have the right to acquire the entire shareholding on the valuation of the shares done by an Independent Chartered Accountant appointed by both the Parties or identify a buyer for the purchase of the entire shareholding within a period of __ weeks from the receipt of the written notice from the Party intending to sell, after which period, the Party intending to sell its shareholding will be entitled to dispose of the shares to any third party. Any notice with regards to intend to sell the shareholding or refusal to acquire the shareholding, shall be done through Registered Post Acknowledgement Due.

17) Governing law; Arbitration.

This Agreement shall be governed by and construed in accordance with the laws of the State of ______ of India and the Parties hereto irrevocably submit to the sole and exclusive jurisdiction of the Courts at _______ in respect of any dispute or matter arising out of or connected with this Agreement. It is further agreed between the Parties hereto that in the event of there being any dispute with regards to this Agreement or any of the terms hereof or the interpretation of any of the terms of the Agreement or any dispute arising under the said Agreement, the same shall be referred to the Arbitration of two Arbitrators appointed by each of the Parties hereto i.e., First Party and the Second Party and the Arbitration proceedings shall be as per the provisions of the Arbitration and Conciliation Act, 1996 and the venue of such Arbitration proceedings shall be held and conducted in _________________alone;

18) Notice.

A) All approvals, consents and notices required to be given or served hereunder by either Party hereto to the other shall be deemed to be given or served if the same shall have been delivered to, left at, sent by international courier, registered airmail or by facsimile by either Party to the other at their following respective addresses:

(i)If to First Party:

[Insert name]

Address: [Insert address]

Attention: [Insert designation/appropriate person]

Telephone: [Insert phone number]

Facsimile: [Insert fax number]

(ii)If to Second Party,

[Insert name]

Address: [Insert address]

Attention: [Insert designation/appropriate person]

Telephone: [Insert phone number]

Facsimile: [Insert fax number]

B) Provided always that any of the Parties aforesaid shall have the right to inform the other of any other address or communication numbers at which such approvals, consents or notices may be served on it by giving at least 5 (five) days prior notice of such change.

C) A notice will be deemed to have been received :

(i) If sent by internationally recognised courier services, 10 (ten) business days after dispatch.

(ii) If sent by registered airmail, 14 (fourteen) business days after dispatch.

(iii) If sent by facsimile, on receipt of confirmation of successful transmission.

19) Miscellaneous.

A) Neither Party may assign or encumber its rights under this Agreement, in whole or in part, without the prior written approval of the other Party.

B) This Agreement supersedes any previous Agreement between the parties thereto in relation to the matters dealt with therein, and represents (together with the documents referred to herein) the entire Agreement between the Parties hereto in relation to such matters and may not be varied except by a written instrument signed by all the Parties hereto. Each of the Parties hereto hereby acknowledges that in entering into this Agreement it has not relied on any representation or warranty save as expressly set out herein or in any document referred to herein.

C) No failure to exercise and no delay in exercising on the part of any of the Parties hereto any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies otherwise provided by law. Each of the Parties hereto may release or compromise the liability of any of the otherParties hereto under this Agreement or grant to such Party time or other indulgence without affecting the liability of any other of the Parties hereto under this Agreement.

D) Notwithstanding that the whole or any part of any provision of this Agreement may prove to be illegal or unenforceable, the other provisions of this Agreement and the remainder of the provision in question shall continue in full force and effect. In relation to any illegal or unenforceable part of this Agreement, the Parties hereto agree to amend such part in such manner as may be requested from time to time by any of the Parties hereto provided that such proposed amendment is legal and enforceable and to the maximum extent possible carries out the original intent of the Parties in relation to that part.

E) The Parties to this Agreement respectively bind themselves, their successors, assigns and legal representatives to the other Party with respect to all covenants of this Agreement;

F) All public statements and releases, including the issuance of photographs, models and renderings, for all media for the duration of this Agreement, are subject to the prior approval of the Board of Directors;

G) This Agreement is in four (4) counterparts in English language, and each such counterpart shall be deemed an original hereof. In case of any conflict between the English version and any translated version of this Agreement, the English version shall govern.

IN WITNESS WHEREOF THE PARTIES hereto has put their respective hands and seal the day and the year first hereinabove written.

SIGNED, SEALED AND DELIVERED }

by the within named }

First Party }

____________________________ }

________________ through the}

hands of ___________________ }

in the presence of............. }

SIGNED, SEALED AND DELIVERED by}

the within named }

"Second Party”}

__________________________ }

___________, through the }

hands of ___________________ }

in the presence of............ }

Annexure - I

Memorandum and Articles of Association

Number of Pages15

DimensionsDesigned for Letter Size (8.5" x 11")

EditableYes (.doc, .wpd and .rtf)

UsageUnlimited number of prints

Product number#33477

This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.

Incorporated Joint Venture Agreement

(India)

THIS JOINT VENTURE AGREEMENT (“Agreement”) is made at ________, on _______________ day of ___________ 20___ between _____________________, a company registered in India, under the Companies Act, 1956 and having its registered office at ___________________________________ , India, hereinafter referred to as the "First Party ” (which expression shall unless repugnant to the context include the Party of the First Part's permitted successors and assigns) AND _____________________________,a incorporated under the Companies Act, 1956 _______, and having its Registered Office at ___________________________, (country) hereinafter referred to as "Second Party ” (which expression shall, unless repugnant to the context include the Second Party 's permitted successors and assigns).

WHEREAS the First Party is engaged in _______________ in India;

WHEREAS the Second Party by itself and its subsidiary companies is engaged in ______________________ in many other countries;

WHEREAS the First Party and the Second Party have entered into an Agreement for the purposes of expanding their business by setting up of a Joint Venture Company (hereinafter called the "JVC") to be set up in India for the purposes of ______________________;

OR [WHEREAS the Parties hereto have decided to float a project of _________________ ( hereinafter referred to as the "Project")];

WHEREAS First Party and Second Party both having the necessary infrastructure and the capabilities of providing the services required for the Project have agreed to form a Joint Venture Company (hereinafter called the "JVC") for the Project and First Party and Second Party are desirous of entering into an Agreement for constituting Joint Venture Company in terms hereof;

WHEREAS the Parties hereto for the said Project have decided to form a Joint Venture Company and whereas subject to all necessary consents, licences, permissions and authorities to be procured for the formation and incorporation of the JVC in the State of ___________ India, with the principle object, inter alia, being that of ____________________;

IN CONSIDERATION of mutual Agreements and undertaking hereunder set out the Parties to this Agreement have granted the rights and accepted the obligations as follows:

1. Incorporation. Both the Parties shall undertake to constitute a new Company (hereinafter called the Joint Venture Company (“JVC”) which will be incorporated under the provisions of the Companies Act, 1956 by the name of _____________. The JVC will be registered in the State of ___________ in India and will have its registered office _________________________________________________ or such other place/s as the Parties may agree upon. The headquarters of the JVC shall be at _________, India.

2. Purpose. It is agreed between the Parties hereto that the said JVC shall have as its object of business recorded in the Memorandum of Association & Articles of Association inter alia

_________________________________________________________________ . The main objects shall include _______________________. The JVC shall be owned, operated and managed by the Parties jointly in accordance with this Agreement and the Memorandum and Articles of Association.

3. Authorised Capital. The initial authorised capital of the JVC will be Rs. _____________(Rupees_____________)- divided into ___________ equity shares of Rs. 10 each. The First Party and the Second Party have agreed to subscribe the share capital of the proposed JVC in the proportion of ______ i.e., the First Party to take ____ equity shares of the aggregate value of Rs.____ and the Second Party ____equity shares of Rs.10/- each of the aggregate value of Rs.____/-.

In addition to the initial subscription mentioned hereinabove, the Parties agree to subscribe to the further issue of share capital of the JVC as may be required in the proportion of ____, i.e., the First Party __% and the Second Party __%.

OR [The Parties further agree that the authorised capital of the said JVC may be increased from time to time as per the provisions of the Companies Act 1956 and as per the financial requirements of the said JVC and as approved by the Board of Directors/General Body Meeting and it is further agreed that on the authorised capital being increased First Party and Second Party will be entitled to subscribe thereto in equal ratio and only after the other Party by written notice under acknowledgement rescinds the offer to apply for additional shares will the other be entitled to subscribe for those share not applied for]

4) Memorandum and Articles of Association.

A) The Memorandum and Articles of Association of the JVC will be as set forth in the draft attached as Annexure - I. These documents may be amended from time to time by written Agreement between the Parties, subject to the provisions of the Companies Act, 1956.

B) Both Parties agree that on signing this Agreement, the Parties agree to take necessary action for the registration of the Joint Venture Company within 30 (thirty) days hereafter.

C) The proposed Memorandum and Articles of Association of the JVC shall include the provisions, but not to limited to the following:

i) The JVC shall have a Board of Directors composed initially of ___ directors, __of which shall be of the choice of the First Party and __ of whom shall be of the choice of the Second Party.

ii) The Chairman of the Board of Directors shall, for the first accounting period of the JVC, be one of the members of the Board of Directors appointed by the First Party and for the duration of the second accounting period be one of the members appointed by the Second Party, where after the Parties shall alternatively have the right to appoint the chairman during the subsequent accounting periods of the JVC.

iii) The Board of Directors shall meet regularly at least ___ times a year, i.e., once in each quarter.

iv) At least 21 days prior notice shall be given to all directors of the Board whether residing in India or otherwise. In case of directors residing outside India, notice shall be sent by telex/fax/cable. Each notice shall set out in sufficient detail, the agenda of items to be transacted at each meeting. A meeting may be held at short notice if it is agreed by all the directors in writing.

v) The quorum necessary for transacting any business of or taking any decision of the Board of Directors shall consist of at least ___directors, of whom at least __ shall have been those appointed by the First Party and __ by the Second Party.

vi) If the minimum number of directors of each of the Parties is not present at the Board Meeting, the meeting shall be adjourned for a day, which shall not be less than 10 days from the original meeting and if at such adjourned meeting the quorum as required is not present, then the adjourned meeting may proceed, provided that the Board shall not take any action concerning matters specified in Annexure 1 hereto and any attempted action by the Board shall be null and void.

5) Directors.

A) The Parties have agreed that they will obtain an undertaking from each person nominated by them to be a director of the JVC that each of them will implement each and every provision of this Agreement.

B) It is further agreed between the Parties that in the event of any of the director from any of the group retiring/being removed/dying or becomes unable to perform the duties of a director or for any reason ceases to be employed by the Party that nominated them then such Party shall promptly by written notice served to the other Party name in successor thereof so that the strength of the Board of Directors remains same as before;

C) Parties shall exercise their powers to ensure that the appointment of directors nominated by each other is not terminated except as may be mutually agreed. In case any director vacates his office due to any reason, including operation of law, the Party which had appointed such director shall have the right to fill in such vacancy by appointment of another director to fill such vacancy and Parties shall ensure that the Board fills such vacancies as provided above.

6) Management.

A) The day to day implementation of the projects and operation of the JVC shall be controlled by the Managing Director of the JVC to be appointed by both the Parties unanimously, who shall be in charge of the technical and administrative operations of the JVC within the policy guidance set by the Board.

B) The Board of Directors shall have full responsibility and authority for the performance of the JVC including but not limited to assignment of services between the Parties, preparation of the schedule of services, settlement of disputes and any other items affecting the performance of services under this Agreement;

C) The Board of Directors shall constitute a committee being the Executive committee for the execution of the work of the Project pursuant to this Agreement and the said committee shall consist of ___ representative/s of First Party and ____ from Second Party;

D) The Executive Committee shall be:

i) Responsible for the direction and management of the work for the Project in accordance with the policies and procedures established by the Board of Directors;

ii) Responsible for the Co-ordination of the work; and

iii)____________________________________________ [Additional duties]

E) The Board of Directors may from time to time change the existing Executive Committee by replacing its representatives, however the representation of First Party and Second Party shall always be [equal] in the ratio of ___ on such committee;

F) Action and decisions of the Board of Directors shall be by unanimous vote and shall be final, and conclusive and binding upon both First Party and Second Party;

G) In the event the Board of Directors is unable to reach any unanimous decision, First Party and Second Party agree that the matter shall be referred to Mr.__________ and _____ Mr. _____with regards to matter relating _________________________________ who shall make an interim decision which may be subject to arbitration if the Parties hereto do not accept the decision;

H) The Parties agree that the Board of Directors shall by and large conduct business of the said JVC on the basis of the Agreement arrived at between them under this Agreement or mutually agreed between them in writing from time to time between them, giving effect to the understanding arrived at between them under this Agreement.

7) Important Decisions.

The following matters shall be decided only by the affirmative vote of the holders of at least 3/4ths of the equity shares of the JVC or of, at least one vote in favour from the group of directors appointed by the First Party and one vote in favour of the directors appointed by the Second Party, it being the intent of the Parties that the following matters will not be decided by the Board of Directors without the consent of at least one director appointed by the First Party and one director appointed by the Second Party :

•Amendment of Memorandum or Articles of Association of the JVC

• Increase or reorganise of share capital of the JVC

• Terms relating to engagement of Managing Director of the JVC

• Declaration of dividends

• Merger or amalgamation of the JVC

• Dissolution or winding up of the JVC or disposition by the JVC substantially all of its assets

• Secrecy and Non-competition

8) Confidentiality. It is agreed by the Parties that during the term of this Agreement they shall hold in confidence and shall not disclose to any third Party without mutual Agreement, any technical know- how, advice, statistical or other data or information that the Parties or the JVC may receive from each other or their employees except as is necessary in the ordinary course of business for implementing this Agreement or if disclosure is required under law.

9) Responsibilities of Parties. Following are the responsibilities of each Party toward the JVC: (List out the responsibilities or obligations of each Party toward the JVC and how the responsibilities are being divided between them. Also add any licenses or Agreements such as Licensing, Technology Transfer Agreements if executed for specific expertise)

Add as applicable:

A) First Party and Second Party shall furnish all necessary know how experience, expertise, man power, managerial assistance to make success of the project undertaken by the said JVC;

B) The JVC shall share, in the manner provided for in the Agreement, the obligations and responsibilities for the services to be performed for the Project as described in this Agreement. Both First Party and Second Party shall give strategic input to the JVC to perform the specific services as given below:

C) It is agreed between Parties hereto that the JVC will employ necessary personnel for the purpose of services to be rendered [for the project] for the works to be undertaken pursuant to this Agreement. The required personnel shall be employed by mutual consent of both Second Party and First Party. The salary and payment with regards to the said employees shall be borne by the said JVC;

D) Both Parties agree that following are the kinds of expenditure that shall be permitted for reimbursements: ____________________________________________________[Mention approved expenses]

10) Covenants of Parties. Both Parties hereby covenant that:

A)[Neither First Party nor Second Party shall enter into any separate Agreement/s with any third party for services in connection with this Project as long as the association between First Party and Second Party with regards to the Project is in existence;] Add only if a specific project is undertaken.

B) The services required of the Parties to Joint Venture Agreement shall be limited to the performance of services required under this Agreement;

C) First Party and Second Party intend that the responsibilities and obligations set out in this Agreement shall be borne and performed by each of the party as stated herein and the financial contribution as and when required for the JVC shall be in proportion of their participation as provided in Clause 3 of this Agreement;

D) The Parties shall be working in co-ordination with each other and for the furtherance of the interest of the said JVC and during the course of work any information, expertise or knowledge material, documents or trade secret exchanged between the Parties shall be kept secret and neither parties hereto shall divulge the same to any third party in any manner whatsoever and accordingly the Parties shall on the incorporation of the said JVC include a Clause in the Memorandum and Articles of Association to maintain the trade secret between the Parties hereto/shareholder/Directors or anyone employed by the said JVC and accordingly the Parties shall also execute such documents between them after incorporation of the said JVC as may be necessary and as advised;

E) During the term of this JVC and for __ years after the termination, the Parties shall not compete with each other directly or indirectly of the business of the JVC.

F) Parties shall not pledge, hypothecate or encumber their shares in the JVC except with the prior consent in writing of the other Party

11) Profits; Losses; Expenses; Dividends.

A) It is agreed between the Parties that amounts received by the JVC will be allotted to First Party and Second Party equally and the distribution so made will be irrespective of the expenses that may be incurred by either Party towards their staff or expenses or any other head of accounts;

B) It is agreed between the First Party and Second Party that after meeting the basic expenses of the JVC, the amounts in hand of the JVC will be distributed between First Party and Second Party in the respective proportion set forth in Clause 3 of this Agreement. Upon completion of this Agreement, funds remaining after payments of outstanding indebtedness of the JVC shall be distributed to the respective Parties in the same proportion as set forth in Clause 3 above;

C) Should the Board of Directors determine that additional funds are required for the performance of the works under this Agreement for any reasons or to pay losses arising therefrom or to eliminate any deficits resulting from prior overpayments to the First Party or Second Party, the Parties shall within __ working days after the decision of the Board of Directors contribute such funds in proportions set forth in Clause 3 of this Agreement;

D) The Parties hereto agree that all the preliminary expenses with regards to the incorporation of the said JVC including all the costs, charges, expenses, professional fees, out of pocket expenses that may be incurred during the incorporation and formation of the said JVC and incidental to the establishment of the said JVC shall be borne by and paid for by the said JVC;

12) Auditors. The Auditors of the JVC shall be Messrs. ___________________ of __________ or such firm of Chartered Accountants as may be agreed by the Parties hereto who shall be responsible in maintaining the day to day books of the JVC on the generally accepted accounting principles.

13)Bankers. The bankers of the JVC shall be _______________ , having its office at ___________________ or such other bank or banks as may be agreed to by the Parties hereto. All payments received by the JVC, in connection with this Agreement, shall be promptly deposited in a joint account and invoices received by the JVC shall be paid by cheque drawn against the said joint account.

14) Intellectual Property.

A) Intellectual property developed solely with respect the works undertaken pursuant to this Agreement will be jointly owned by all Parties. Such intellectual property which shall include, but not limited to, reports, analysis, designs, drawings, specifications and other instruments of service prepared pursuant to this Agreement shall be registered, patented, copyrighted and secured as intellectual property rights as per the provision of law and in the name of the JVC. The JVC shall have the ownership and rights and privileges of all intellectual property rights acquired in the course of the [the Project] performance of the works under this Agreement and in so far as it is consistent with this Agreement Second Party and First Party will be entitled to use such intellectual property for any of its purpose including to prepare documents for other projects based on such project information without any payment thereof;

B) The Parties hereby offer licenses to each other for the intellectual property or copyrights owned by each Party developed before the execution of this Agreement and which may be used in the performance of works under this JVC. Each Party shall be deemed to have granted the other Parties a royalty-free, non-exclusive and non-assignable license to make use of any such documents or other material and data or other information and devices or processes in the context of the works under this JVC. The licensee/s shall have no right to reproduce, copy, alter, reverse engineer, and sell the licenses granted by the licensor.

C) Neither of Second Party nor First Party shall assign or transfer the intellectual property rights and interest so acquired or established pursuant to this Agreement by the JVC in the course of its works, nor permit reproduction of proprietary documents, in any manner resulting in infringement or violation of any of the intellectual property rights secured by the JVC during the course of the JVC except upon written consent of the other Party

15) Term; Termination.

A) The terms of this Agreement shall remain in force until terminated earlier for the reasons set forth herein.

B) This Agreement will be terminated:

i) on the date mutually agreed in writing by the Parties; or

ii) on the date when the JVC is wound up by an order from a court;

iii) for a party, when it ceases to be a shareholder in the JVC.

iv) In the event that a Party fails to make timely payment of any amounts due under this Agreement, or within 10 business days after demand therefor, the non-breaching party or parties may terminate any of this Agreements upon 30 days prior written notice, unless the breaching party cures such breach by paying all past-due amounts within such 30 day notice period, provided that such breaching party shall be entitled to use such cure provision no more than once in any 12 month period.

C) Termination of this Agreement will not prejudice any accrued rights or liabilities of a party.

D) Clauses 8, 10 E), 14 C) survive for __ years after the termination of this Agreement and will be enforceable at any time at law and in equity and will enure to the benefit of and be enforceable by the JVC and the Parties and its or their successors and assigns and be binding on each party and its or their successors and assigns.

16) Transfer of Shares.In the event of any one of the Party decides to dispose off its shareholding, which shall always be the entire shareholding, it shall give notice of its intent of disposal to the other Party, and the other Party will have the right to acquire the entire shareholding on the valuation of the shares done by an Independent Chartered Accountant appointed by both the Parties or identify a buyer for the purchase of the entire shareholding within a period of __ weeks from the receipt of the written notice from the Party intending to sell, after which period, the Party intending to sell its shareholding will be entitled to dispose of the shares to any third party. Any notice with regards to intend to sell the shareholding or refusal to acquire the shareholding, shall be done through Registered Post Acknowledgement Due.

17) Governing law; Arbitration.

This Agreement shall be governed by and construed in accordance with the laws of the State of ______ of India and the Parties hereto irrevocably submit to the sole and exclusive jurisdiction of the Courts at _______ in respect of any dispute or matter arising out of or connected with this Agreement. It is further agreed between the Parties hereto that in the event of there being any dispute with regards to this Agreement or any of the terms hereof or the interpretation of any of the terms of the Agreement or any dispute arising under the said Agreement, the same shall be referred to the Arbitration of two Arbitrators appointed by each of the Parties hereto i.e., First Party and the Second Party and the Arbitration proceedings shall be as per the provisions of the Arbitration and Conciliation Act, 1996 and the venue of such Arbitration proceedings shall be held and conducted in _________________alone;

18) Notice.

A) All approvals, consents and notices required to be given or served hereunder by either Party hereto to the other shall be deemed to be given or served if the same shall have been delivered to, left at, sent by international courier, registered airmail or by facsimile by either Party to the other at their following respective addresses:

(i)If to First Party:

[Insert name]

Address: [Insert address]

Attention: [Insert designation/appropriate person]

Telephone: [Insert phone number]

Facsimile: [Insert fax number]

(ii)If to Second Party,

[Insert name]

Address: [Insert address]

Attention: [Insert designation/appropriate person]

Telephone: [Insert phone number]

Facsimile: [Insert fax number]

B) Provided always that any of the Parties aforesaid shall have the right to inform the other of any other address or communication numbers at which such approvals, consents or notices may be served on it by giving at least 5 (five) days prior notice of such change.

C) A notice will be deemed to have been received :

(i) If sent by internationally recognised courier services, 10 (ten) business days after dispatch.

(ii) If sent by registered airmail, 14 (fourteen) business days after dispatch.

(iii) If sent by facsimile, on receipt of confirmation of successful transmission.

19) Miscellaneous.

A) Neither Party may assign or encumber its rights under this Agreement, in whole or in part, without the prior written approval of the other Party.

B) This Agreement supersedes any previous Agreement between the parties thereto in relation to the matters dealt with therein, and represents (together with the documents referred to herein) the entire Agreement between the Parties hereto in relation to such matters and may not be varied except by a written instrument signed by all the Parties hereto. Each of the Parties hereto hereby acknowledges that in entering into this Agreement it has not relied on any representation or warranty save as expressly set out herein or in any document referred to herein.

C) No failure to exercise and no delay in exercising on the part of any of the Parties hereto any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies otherwise provided by law. Each of the Parties hereto may release or compromise the liability of any of the otherParties hereto under this Agreement or grant to such Party time or other indulgence without affecting the liability of any other of the Parties hereto under this Agreement.

D) Notwithstanding that the whole or any part of any provision of this Agreement may prove to be illegal or unenforceable, the other provisions of this Agreement and the remainder of the provision in question shall continue in full force and effect. In relation to any illegal or unenforceable part of this Agreement, the Parties hereto agree to amend such part in such manner as may be requested from time to time by any of the Parties hereto provided that such proposed amendment is legal and enforceable and to the maximum extent possible carries out the original intent of the Parties in relation to that part.

E) The Parties to this Agreement respectively bind themselves, their successors, assigns and legal representatives to the other Party with respect to all covenants of this Agreement;

F) All public statements and releases, including the issuance of photographs, models and renderings, for all media for the duration of this Agreement, are subject to the prior approval of the Board of Directors;

G) This Agreement is in four (4) counterparts in English language, and each such counterpart shall be deemed an original hereof. In case of any conflict between the English version and any translated version of this Agreement, the English version shall govern.

IN WITNESS WHEREOF THE PARTIES hereto has put their respective hands and seal the day and the year first hereinabove written.

SIGNED, SEALED AND DELIVERED }

by the within named }

First Party }

____________________________ }

________________ through the}

hands of ___________________ }

in the presence of............. }

SIGNED, SEALED AND DELIVERED by}

the within named }

"Second Party”}

__________________________ }

___________, through the }

hands of ___________________ }

in the presence of............ }

Annexure - I

Memorandum and Articles of Association

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